On August 21, 2024, Zoom Video Communications Inc (ZM, Financial) released its 8-K filing for the second quarter of fiscal year 2025, showcasing a solid performance that exceeded analyst estimates. Zoom, a leading provider of a communications platform that connects people through video, voice, chat, and content sharing, reported significant financial achievements and growth in key areas.
Performance Overview
Zoom Video Communications Inc (ZM, Financial) reported total revenue of $1,162.5 million for the second quarter, marking a 2.1% year-over-year increase. This figure surpassed the analyst estimate of $1,149.49 million. The company's GAAP net income for the quarter was $219.0 million, or $0.70 per share, exceeding the estimated earnings per share of $0.50. Non-GAAP net income was $436.4 million, or $1.39 per share.
Key Financial Metrics
Zoom's financial highlights for the second quarter of fiscal year 2025 include:
| Metric | Q2 FY2025 | Q2 FY2024 | Change |
|---|---|---|---|
| Total Revenue | $1,162.5 million | $1,138.7 million | +2.1% |
| GAAP Net Income | $219.0 million | $182.0 million | +20.3% |
| Non-GAAP Net Income | $436.4 million | $409.6 million | +6.5% |
| Operating Cash Flow | $449.3 million | $336.0 million | +33.7% |
| Free Cash Flow | $365.1 million | $289.4 million | +26.2% |
Income Statement and Balance Sheet Insights
Zoom's GAAP income from operations for the second quarter was $202.4 million, compared to $177.6 million in the same period last year. The GAAP operating margin was 17.4%, while the non-GAAP operating margin stood at 39.2%. The company also reported a significant increase in operating cash flow, which rose by 33.7% year-over-year to $449.3 million.
On the balance sheet, Zoom's total assets as of July 31, 2024, were $10.5 billion, with cash, cash equivalents, and marketable securities totaling $7.5 billion. The company repurchased approximately 4.8 million shares of common stock during the quarter, reflecting its strong cash position and commitment to returning value to shareholders.
Customer Metrics and Market Performance
Zoom's customer base continued to grow, with 3,933 customers contributing more than $100,000 in trailing 12 months revenue, up 7.1% year-over-year. The company also reported having approximately 191,600 enterprise customers and a trailing 12-month net dollar expansion rate for enterprise customers of 98%. The online average monthly churn reached its lowest ever rate at 2.9%.
“In Q2, we outperformed our guidance across the board and grew operating cash flow and free cash flow by 33.7% and 26.2% year over year, respectively, demonstrating our continued commitment to efficient growth,” said Eric S. Yuan, Zoom founder, and CEO.
Financial Outlook
Looking ahead, Zoom provided guidance for the third quarter and full fiscal year 2025. The company expects third-quarter revenue to be between $1.160 billion and $1.165 billion, with non-GAAP diluted EPS between $1.29 and $1.31. For the full fiscal year 2025, Zoom anticipates total revenue between $4.630 billion and $4.640 billion, and non-GAAP diluted EPS between $5.29 and $5.32.
Zoom Video Communications Inc (ZM, Financial) continues to demonstrate resilience and growth in a competitive market, leveraging its robust platform to connect users globally. The company's strong financial performance and strategic initiatives position it well for sustained success in the communications industry.
Explore the complete 8-K earnings release (here) from Zoom Video Communications Inc for further details.
